Just a reminder that Obamacare is doing what it intended: Squeeze the middle class

Making healthcare more expensive for the middle class is intended to eliminate the middle class, eventually. Obamacare in its gradualism is an example of Fabian socialism. 

But it's classic Marxism nonetheless, wherein the middle class is seen to be the greatest enemy, not the rich. The middle class stands in the proletariat's way in its contest against the rich. The middle class must be reduced and absorbed by the proletariat in order to end the possibility of the middle class getting wealthier and rising up the economic ladder.

Instead the middle class must be forced down the economic ladder.

We are living it, but the masses hardly notice as they are anesthetized by libertarian phantoms in fake news, entertainments, drugs and assorted excesses of appetite. The effect of it all is an equality! How could that be bad!?

The enemy proceeds with utter seriousness, corrupting the body politic, while seriousness can hardly be found in anyone else.   

Nothing shows the impoverishment of the middle class better than the decline in owning your own home since the year 2000

Neel Kashkari and other Fed members seem aware at least of the nosedive in labor's share of business income, but are oblivious to its roots in globalization

Fooling around with interest rates isn't going to bring back the core manufacturing businesses which once formed the hubs of American middle class prosperity. That will be just as ineffectual as it has been throughout the Obama administration. Why should it work now all of a sudden when it hasn't worked for ten years?

Well, what else would you expect from the man tasked with implementing the useless TARP sideshow?

Neel Kashkari still hasn't got a clue, but he sure does sound like the workers' friend.

Kashkari Says Worker Bargaining Power Should Inform Fed's Stance: 

Minneapolis Fed chief links rates to labor share in interview

Kashkari’s break from Fed tradition on inequality adds to the case for keeping interest rates low. He suggested faster wage growth and low unemployment may not be putting much upward pressure on inflation because workers have lost a lot of their bargaining power in recent decades, echoing a point Fed Vice Chairman Richard Clarida has made. ...

Joe "Middle Class" Biden edging AWAY from the working class because he's gotten rich: He used to be "Lunchbox Joe", but POLITICO seems to know nothing about it

‘Middle-Class Joe’ rakes in millions POLITICO 3/18/19:

He’s repeatedly referred to himself as “Middle-Class Joe” on the campaign trail and in speaking engagements as he publicly mulls whether to run for president. ... “I know I’m called Middle-Class Joe. It’s not meant to be a compliment. It means I’m not sophisticated. But I know what made this country what it is: ordinary people doing extraordinary things,” Biden said in Kentucky last year, a refrain he’s used repeatedly for years, including when he floated a potential presidential run in 2017.

5 things Biden pick says about Obama POLITICO 8/23/08:

4. He’s more worried about Lunchbox Joe than Bubba. Obama was not persuaded by arguments that Democrats for the past 60 years have won the presidency only when they've had a Southerner on the ticket. He seems confident he can put a few states in the Old Confederacy in play by stoking African-American turnout. Perhaps. But he also is calculating that his more urgent concern is working-class whites, especially those in the industrial Midwest. Hillary Rodham Clinton clobbered him in these areas — and white men remain very skeptical of him, if you believe the polls (and his people do). At the public unveiling of the ticket Saturday at Springfield, Ill., Obama called Biden a “scrappy kid from Scranton.” 

Finally, an article from the right which tells the truth about Trump's immigration betrayal

Trump Promised a Wall and Delivered an Amnesty:

 

The president who was elected by the forgotten middle of the country on promises to build a wall, enforce immigration laws, and protect their economic interests just signed into law a bill that betrays all of those promises. ... Trump just signed a law that makes the wall, even if it is finally constructed, less useful because it provides a large, ongoing, uncapped amnesty. Further, the law expanded legal immigration by doubling the cap for H2B unskilled, non-agricultural workers. This is slap in the face to the working and middle class workers who President Trump repeatedly has promised to protect and whose wages he says he wants to see increase.

 

Peggy Noonan is blind about conservatism

Republicans Need to Save Capitalism:

I’ll go whole hog here. We need a cleaned-up capitalism, not a weary, sighing, acceptance-of-man’s-fallen-nature capitalism.

Weary sighing acceptance? Try the eager jubilant over being given free reign to exploit man's fallen nature capitalism.

Reagan "conservatives" preached that the Reagan tax cuts and free-trade would usher in a period of investment at home, in a word, that if you just let people have more of their own money they'd know what to do with it and they would do the right thing.

They didn't.

"Conservatives" exported our jobs and invested abroad, creating middle classes in poor countries where there were none before, at the expense of the middle class at home. They drove the opening to China, enriched it and created a monster which now robs us blind and threatens world peace. The libertarians have sold China the rope the communists hope to hang us with.

If Republicans and conservatives had properly understood human nature they wouldn't have made this mistake. The doctrinaire among them showed themselves to be liberals, not conservatives, possessed of a foolish optimism based on the idea that people are basically good. They are not. People do what's best for number one, as they always have. Screw thy neighbor, and thy country if necessary. Are we not a nation of immigrants?

Only conservatism with its roots in the transcendent moral order has been able to curb this false individualism and mistaken enthusiasm. Both were routinely attacked in church in former days, but nobody seems to go there anymore, and when they do go the preacher turns out to have joined the wrong side.

The "conservative" rubes out there still believe this stupid myth of libertarianism, while the billionaire class of both parties which got rich off it only hopes they continue to do so.

They care about nothing but themselves and their right to privacy, the penumbra of our collective deviancy.

Traitors to the middle class: Kamala Harris, Mike Lee, Zoe Lofgren, Ken Buck, and of course the Koch Bros.

Billionaire Kochs Back GOP/Dem Plan to Outsource Middle Class American Jobs:

A plan known as the Fairness for High-Skilled Immigrants Act introduced in the Senate by Sen. Mike Lee (R-UT) and Sen. Kamala Harris (D-CA), as well as Rep. Zoe Lofgren (D-CA) and Rep. Ken Buck (R-CO), would eliminate the U.S. country caps in the legal immigration system that would fast track outsourcing of white-collar American jobs to mostly Indian and Chinese nationals imported to the country by businesses, outsourcing firms, and multinational corporations.

Ann Coulter says she agrees with AOC: Raise taxes on the rich

Ann just wants to punish the Koch Brothers in the process, but there's a better reason to agree.

Good government acts like a curb on a street, steering behavior. That's what taxing the rich used to be all about.

How so?

Once enacted in 1916, high taxation of ordinary income didn't result in high revenues for government. That's why the income tax was extended to almost all earners instead of just the rich when it became clear within a few years that government wouldn't have enough money to play in the international sandbox without more dough. For their part the rich won long term tax concessions through diverting derivation of income from capitalist enterprises, the latter benefiting not just themselves as owners but also individuals with jobs, the country with productivity, and the government with additional multiple streams of revenue. It was an intricate but effective way of benefiting all concerned. 

The mistake with the Reagan Revolution was that it misunderstood human nature. It thought lots of new untaxed ordinary income would end up getting invested just the same way, and turn America into something never before seen. But the money didn't get invested the same way. It fled abroad where the cost of doing business was cheaper. It helped create middle classes wherever it went, but ours withered on the vine. Meanwhile the number of US billionaires mushroomed, the ratio of CEO pay to worker pay went ballistic, and general income inequality increased dramatically. Real incomes for most people have barely moved up since the 1970s.

And now here we are with an America never before seen indeed, where libertarian advocates of this destructive system tell us with a straight face that this is patriotism.

Unfortunately, none of this is in the pea brain of AOC, let alone in Ann Coulter's, Kevin McCarthy's or Donald Trump's.  

Next stop for beer-drinking Cherokee woman Elizabeth Warren: A visit to the hardware store "to get me a huntin' license"

Must be something in the water up there in Massachusetts that turns people into phony baloney plastic banana good time rock-n-rollas. Michael Dukakis in the tank, John Kerry goes a huntin', and now Elizabeth Warren cracks open a cold one in a New Year's Eve chat streamed live. Hm. Tongues are a-wagging. A drinking Indian, huh? Was it an India Pale Ale?

The article forgets to mention the incident involving John Kerry, who served in Vietnam.

 Cashman: Elizabeth Warren racks up another Dukakis moment :

With the beer vid — trying to sell herself as your average beer-swigging multimillionaire former Harvard Law prof who’s a champion of the middle class — Warren has racked up two strikes in short order. Three strikes and … it could be just Beto O’Rourke vs. Kamala Harris on the left side of the Democrats’ debate stage.

 

H. Ross Perot's $13/hr factory jobs going to Mexico in 1992 should pay $27/hr today adjusted for inflation but pay only $18

The giant sucking sound clip from 1992 is here.

Perot characterized factory wages in 1992 as typically paying between $12 and $14 per hour.

Adjusted for inflation the $13 job in 2017 would pay nearly $27 per hour. The reality is it pays a lot less than that. Factory work in Michigan today basically starts at $15, up only 25% not 107%. The average manufacturing job paying $21+ is composed of a lot of such lower paying positions.

The reality is in Michigan that the top eventual $18/hr advertised wage is the equivalent of less than $9/hr in 1992.

The jobs have gone out of the country, expanding middle classes abroad while impoverishing our own at home.

Camille Paglia: So far the Democrats have no one to run against Trump

Camille Paglia: ‘Hillary wants Trump to win again’:

Kamala Harris = ruthless inquistor without crossover appeal

Elizabeth Warren = screechy representative only to the upper middle class 

Kirsten Gillibrand = a wobbly mediocrity

Cory Booker = has all the gravitas of a cork

Andrew Cuomo = yapping puppy with a muddy tail

Bernie Sanders = old and creaky

Joe Biden = creaky and old

Hillary = damaged goods, stumbling, hacking and shop-worn

Like just about everyone else on the left, Joel Kotkin continues to twist himself in pretzels to avoid calling our system what it already is

State capitalism.

It is the socialism of the right, despite what names people may give it. The fascist model in which business and government cooperate now more, now less was not defeated in World War II. The superior American version simply defeated the German one, and eventually also the left's inherently weaker version in Russia.

It has triumphed globally, brought to the fore in America by the libertarian resurgence under Ronald Reagan, imitated by the jealous Euro project, and notably exported to China, where it was eagerly embraced as no threat to Marxism. To the genuine Marxist, remember, free-trade is welcome because it hastens the global revolution. Belt and Road participants, take note.

The experiential groundwork for global state capitalism was laid long ago by the King and Bank of England in their joint enterprise known as the Thirteen Colonies. Everyone imitates this now in principle if not always in particulars. But everywhere it flourishes it is facilitated by the same thing, the central banking systems which coordinate their activities through rules administered under Basel III. The contemporary exemplars of state capitalism fancy that they are substantively a world away from Hitler's Germany, because, well, the Jews. We don't kill Jews, insist these experts at mass abortion and Uyghur mass re-education. 

It's the historical resonances which bother the left in using the phrase, but the underlying facts aren't different in substance. Materialism today means not having to say you're sorry for treating people like depreciated or unappreciated assets. Older workers in the West are routinely tossed aside for being too costly. Potential younger competitors are hamstrung by a culture of costly credentialing prerequisites. When such people become worthless enough, it isn't unlikely that in some places they could stop being considered people altogether (typically where atheism reigns) so that they could be slaughtered wholesale with the same relative efficiency already applied to the unborn. The tech already exists to do this. The only question is when will the people exist who are possessed of enough nerve.   

Here's Kotkin on this so-called "new, innovative approach" which looks like nothing so much as the old Soviet Union, with its hostility centered on the middle class, its dreary blocks of drab apartment buildings, the dim pall of surveillance and conformity lurking everywhere, complete with its own privileged new class in service to the party .01 percent:

Oligarchal socialism allows for the current, ever-growing concentration of wealth and power in a few hands — notably tech and financial moguls — while seeking ways to ameliorate the reality of growing poverty, slowing social mobility and indebtedness. This will be achieved not by breaking up or targeting the oligarchs, which they would fight to the bitter end, but through the massive increase in state taxpayer support. ... [T]he tech oligarchy — the people who run the five most capitalized firms on Wall Street — have [sic] a far less egalitarian vision. ... [T]hey see government spending as a means of keeping the populist pitchforks away. ... Handouts, including housing subsidies, could guarantee for the next generation a future not of owned houses, but rented small, modest apartments. ...  They appeal to progressives by advocating politically correct views . . .. Faced with limited future prospects, more millennials already prefer socialism to capitalism and generally renounce constitutionally sanctioned free speech . . .. [I]ncreased income guarantees, nationalized health care, housing subsidies, rent control and free education could also help firms maintain a gig-oriented [slave] economy since these employers do not provide the basic benefits often offered by more traditional “evil” corporations . . ..  [T]he oligarchy, representing basically the top .01 percent of the population, are primarily interested not in lower taxes but in protecting their market shares and capital. ... The losers here will be our once-protean middle class. Unlike the owners of corporations in the past, oligarchs have no interest in their workers become homeowners or moving up the class ladder. Their agenda instead is forever-denser, super-expensive rental housing for their primarily young, and often short-term, employees. ... The tech moguls get to remain wealthy beyond the most extreme dreams of avarice, while their allies in progressive circles and the media, which they increasingly own, continue to hector everyone else about giving up their own aspirations. All the middle and upwardly mobile working class gets is the right to pay ever more taxes, while they watch many of their children devolve into serfs, dependent on alms and subsidies for their survival.

Tucker Carlson says there's nothing free about this market, falls short of calling it an expression of global fascism

But who knows, maybe his forthcoming book connects the dots between the multinational corporations and their revolving door governments, and the central banking system which mediates the operation.

Here:

TUCKER CARLSON, FOX NEWS: 

Jeff Bezos, the founder of Amazon, is worth about $150 billion. That’s enough to make him the richest man in the world, by far, and possibly the richest person in human history. It’s certainly enough to pay his employees well. But he doesn’t. A huge number of Amazon workers are so poorly paid, they qualify for federal welfare benefits. According to data from the nonprofit group New Food Economy, nearly one in three Amazon employees in Arizona, for example, was on food stamps last year. Jeff Bezos isn’t paying his workers enough to eat, so you made up the difference with your tax dollars. Next time you see Bezos, make sure he says thank you.

Same with the Waltons. The Walton family founded Walmart. Collectively they’re worth about $175 billion. That’s more than the entire gross domestic product of Qatar, the oil-rich Gulf state. The Waltons could certainly afford to be generous with their workers. Instead, they count on you to take up the slack. In 2013, taxpayers sent more than $6 billion to Walmart’s workers, for food stamps, Medicaid, and housing assistance.

And if you think that’s shocking, meet Travis Kalanick. He’s the youthful founder of Uber. His personal fortune is close to $5 billion. His drivers, by contrast, often make less than minimum wage. One recent study showed that many Uber drivers lose money working for the company. That’s not a sustainable business model. The only reason it continues is because of your generosity. Because you’re paying the welfare benefits for Uber’s impoverished drivers, child billionaires like Travis get to keep buying bigger houses and more airplanes. He’s someone else who definitely owes you a thank you note.

If you can think of a less fair system than that, send us an email. We’d love to hear it. It’s indefensible. Yet almost nobody ever complains about it. How come? Conservatives, like us, support the free market, and for good reason. Free markets work. But there’s nothing free about this market. A lot of these companies operate as monopolies. They hate markets. They use government regulation to crush competition. There’s nothing conservative about that, just as there’s nothing conservative about most big corporations. Just the opposite. They’re the backbone of the left. Pick a leftwing cause that you think is hurting the country. Check the donor list, and you’ll find the name of some corporation. Often many corporations. Corporate America enables the progressive lunacy you see every night on this show. They’re funding the revolution now in progress.

That’s why liberals say nothing as oligarchs amass billions by soaking the middle class. Because they’ve been paid off. For example, you probably assumed the people who founded Walmart were conservative. Most of their customers certainly are. Yet the bulk of the Walton family backed Hillary Clinton in the last election. They gave the Democratic Party more than $700,000 during the 2016 cycle. Almost every billionaire in Silicon Valley did the same. In return, they got immunity from criticism, and you got to keep paying their employees. Not a bad deal for them.

There is one person in Washington who’s offended by this arrangement, and we’re sorry to say he’s wrong on pretty much everything else. But this is a weird moment, so you take allies where you can find them. Bernie Sanders, of all people, is trying to get your money back from Jeff Bezos. This is especially amazing since Bezos is on Bernie’s side on most things. They’re both leftwing activists. But on this question, Bernie’s right. He’s planning legislation that would force big corporations to return the taxpayer-funded welfare benefits you’ve paid to their workers. It’s not a perfect solution, and it probably won’t pass. No matter what they claim in public, liberals in Congress would never support something like that. Their loyalty isn’t to you. It’s to Uber and Jeff Bezos. But at the very least it might awaken a sleepy population to the new reality of activist corporate America. And that’s a good thing.

America has changed enormously in the last 20 years. A lot of people you thought were your allies are in fact working against your interests. They have contempt for you and your family, your customs and your faith. Included in this group, I’m sorry to say, are a lot of big corporations. They have no use for you or the country you grew up in. Stand in their way, and they’ll crush you. It’s all shocking enough that I recently wrote a book about it. It’s called “Ship of Fools,” and it explains what happened and who did it. The book is out in a month, the first week of October, but you can preorder a copy now, and I hope you will.

Author finds cost of housing and daycare to be the main drivers of the middle class "squeeze"

From the transcript of the podcast here:

Middle-class life is 30% more expensive than it was 20 years ago. ... The main problem is the cost of housing. ... The second problem was the cost of daycare. A lot of it had to do with wages that were just not keeping up with other kinds of expenses. ...  [R]eal estate is no longer a place to live, but it’s an investment vehicle. That has driven up the cost of housing for ordinary people or the precarious middle class, as I call them. 

Unstated here is the new necessity of two incomes once women entered the labor force in quantity after the 1960s under the influence of feminist ideology. For the first twenty years of the post-war this was not so. When you dramatically increase the size of the labor force, the cost of the labor naturally comes down. The result was that women entering the workforce increased their average real income, but only just enough over time to pay for the cost of daycare, a wash. Meanwhile real male incomes stagnated.

Women working in large numbers naturally put pressure on the future growth of the labor force as well. Because they were not having the children who would become the country's next workers, a future labor shortage was inevitable as the post-war 4-child families transformed into 2-child families.

Enter the pressure to increase immigration, wink at low-labor-cost illegal immigration, and export jobs, a new era of which was inaugurated under George H. W. Bush in 1989, who doubled the level of legal immigration overnight, and under his son George W. Bush in 2001, who presided over the export of 3 million manufacturing jobs, a trend continued under Barack Obama who exported 3 million more. Manufacturing jobs had been the most important anchors and hubs for middle class jobs in American communities, the absence of which turned college from an option into a necessity in order to maintain what was formerly possible with only a high school diploma. Increase the demand for college, and you increase its price, and with it the pressure on stagnating pocketbooks.

Housing prices rose dramatically from the late 1990s in consequence of the fateful decision under Bill Clinton to unleash the savings hidden in the nation's housing stock for sixty years. Clinton signed in 1997 the libertarian Republican legislation rewriting the tax laws which had forced homeowners to stay in their homes or move up to avoid large capital gains tax hits. Large economic forces were behind this, not the least of which was the growing sense of the unsustainability of the middle class consumption culture without a new source of savings. 

The birth of the housing ATM under Reagan in the 1980s had no doubt prepared the way for these developments, who infamously did away with the tax deductibility of credit card interest while increasing the same for home equity lines of credit. The effect was to get the children of the Baby Boom to think of their homes as mere commodities which could be exploited to extract value. The liquidity unleashed by the Clinton legislation ten years later hit the economy like a tidal wave, driving prices higher and higher into the now infamous housing bubble as homes were churned by flippers and families alike. It took just ten years of that to drive the economy into the worst panic it had experienced since the Great Depression.

Reversing these horrible developments would require a civilizational transformation of values which in the past only Protestant Christianity seems to have been able to provide. Feminist ideology, like all ideology, has done nothing but take away. The revaluation of values necessary in our situation would have to begin with women insisting on fidelity and marriage once again. Women are biologically predisposed to the self-sacrifice needed. To get the men to go along they will need a Lysistrata, but she's probably not Camille Paglia.

Communism works in only one place.  

Slate takes The Atlantic to task for not taking the 1% seriously enough

Here in "Actually, the 1 Percent Are Still The Problem".

Actually, the Reagan 1986 tax reform was the problem, but Jordan Weissmann never mentions it.

This despite his wonderful graph of the top 10% over time showing the 1% take-off after the reform. When it becomes easier for the already rich to take high incomes the ordinary way, like everyone else, because of low top marginal rates, less money ends up getting plowed back into productive purposes like it used to before 1986.

We keep believing the myth that "the rich are different than you and me", but they're not. They're as indolent, undisciplined and blinkered as any middle class family leveraged to the hilt which believes it deserves a house a little larger than it can afford, two car payments, the weekly fine dinner out and the expensive annual winter vacation.

The 1% aren't the problem. You will have them always with you, by definition. The problem is human nature, and government's failure to correct for it.

Say what you will about "Christian" belief, previously it at least curbed the 1%'s enthusiasm, with the stick of high marginal income tax rates and the carrot of low long term capital gains taxes.

The face of the declining middle class in 2016 was concealed as 15 million more lived in doubled-up households than in 2005

Zillow reported (here) in December that working age adults in 2016 were living in doubled-up households at a rate of 30% compared with 21% in 2005.

That works out to roughly 32 million in 2005 at the 21% rate vs. 50 million in 2016 at the 30% rate, using the Working Age Population data from FRED.

Had the rate remained 21% in 2016, just 35 million would be living doubled-up instead of 50 million. 

That's 15 million more adults who can't afford to buy, and can't even afford to rent, thanks to the feckless performances of George W. Bush and Barack H. Obama.

h/t Jeffrey Snider, Alhambra Investments

Read it and weep, suckers: Trump tells his rich friends at Mar-a-Lago that they just got a lot richer

"You all just got a lot richer," Trump tells friends, referencing tax overhaul

'The president himself on Sept. 13 -- long before the bill was finalized -- said the wealthy would not benefit from the GOP tax overhaul.

'"The rich will not be gaining at all with this plan. We are looking for the middle class and we are looking for jobs -- jobs being the economy," Mr. Trump said.'

Joe Curl at The Washington Times is a lonely voice on the right speaking out against the Republican tax "reform"

Here in "Middle class gets trickled on again in tax-cut bill".

Or, as Fletcher might have put it, don't piss down my back and tell me it's rainin'.

Recent history shows that recipients of lower top marginal income tax rates haven't invested the money . . . here

The top marginal rate averaged 70% from 1960, 73% shown is from 1956. The investment data starts in 1960.

Individuals and businesses need incentives to invest here in the United States. They won't do it naturally.

Recent tax history shows this to be the case. For decades when top marginal income tax rates were very high before 1986, the most successful in our society plowed money into domestic investment to grow businesses through which they could derive income, which was taxed at lower long term rates than ordinary income which was taxed at very high rates. Not only did they themselves benefit handsomely, but the whole country benefited because people found useful employment and government received tax revenue. It was an arrangement which made America great.

After the 1986 tax reform which lowered top marginal rates, this stopped being true. The record shows a steep fall-off in domestic investment, which is one reason why incomes and jobs have been stagnant and deficits have piled up. 

The other reason, of course, is free-trade, euphemistically called globalization, which made it possible for businesses to invest internationally instead of domestically. This has been a boon to the growth of middle classes in other countries, but not in our own.

It's not very patriotic, is it?

What we need now is government policy which rewards domestic investment, and punishes its export. The best way to do this is to abolish taxation on domestic business completely to attract more of it, and heavily tax foreign business. We should also reinstate the correct mix of high top marginal income tax rates to incentivize business investment, coupled with attractive long term capital gains tax rates as a reward to the true risk-takers.

Needless to say, the Republican shift away from worldwide taxation to territorial taxation in the "reform" is about reducing risk to established business. This is simply going to make matters much worse for the American middle class, as is the obsession with making money the easy way through lower top marginal ordinary income tax rates.

The American character and spirit I once knew appears to be truly dead.

How to know the Senate tax bill SUCKS: John McCain now supports it

From the story here:

"After careful thought and consideration, I have decided to support the Senate tax reform bill," McCain said in a statement. "I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long overdue tax relief for middle class families."